SAN FRANCISCO (Reuters) - Yahoo Inc. said on Thursday it will begin
testing a free desktop search service in early January, following
rivals hoping to extend the reach of wildly profitable search-related
advertising.

Desktop search, which helps excavate information buried on computer
hard drives, is seen as the next frontier in the booming search sector
that has generated billions in revenues from ads generated by Web
search queries.

Yahoo's product will use licensed technology from Pasadena, California-
based X1 Technologies Inc. to help users search e-mail and a variety
of files -- from photos and music to PDF-format documents -- on their
hard drives.

Those search capabilities also will be integrated with Yahoo's own Web
search technology, said Jeff Weiner, senior vice president of Yahoo's
search and marketplace business.

Sunnyvale, California-based Yahoo expects to roll out rapid updates to
its desktop service, which will eventually allow users to search even
more of the Web -- including content from Yahoo chat groups, address
book and instant messaging archives.

Software giant Microsoft Corp., whose Windows operating system runs on
more than 90 percent of the world's personal computers, bought a
desktop search business in July and has said it will launch its own
desktop search engine by year-end.

Ask Jeeves Inc. bought desktop search company Tukaroo Inc. in June
and also has said it will launch sometime this month.

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